Saturday, January 7, 2012

The future of BC Ferries: The editorial

This one comes from Craig McInnes at the Vancouver Sun. It is certainly worth reading. There is a bit of historical inaccuracy, although that should not deter you from absorbing the basic premise of McInnes' opinion: that any ferry system in BC is ultimately subject to the swirl of provincial politics.

McInnes suggests that Hahn's compensation issue was a sideshow. On the surface that may well be true, however, Mr. Hahn often appeared to lack a complete understanding of his position. He should have been aware from the start that his position was not that of a private sector CEO, no more than BC Ferries in the Gordon Campbell restructuring was not a private company.

At one point Hahn responded in an interview that, aside from having to keep travelers appeased, his biggest single customer was the government of British Columbia. True as that statement might be, it demonstrated a failure to acknowledge that his "biggest single customer" got every penny of its money from BC taxpayers and therefore voters.

1 comment:

If Craig McInnes intended to write something other than a BCF friendly puff piece, his article demonstrates both his poor judgment and ignorance.

The extravagance of the Board of Directors in giving Hahn and his senior officers blank cheques is not a sideshow. I don't mean only Hahn's salary which MSM usually understates by ignoring the $450,000 supplemental pension contribution in each of three years. Employing Hahn for the last three fiscal years cost $4.435 million. Washington State Ferries paid their CEO 1/10 of that amount during the same time. (They have more passenger and vehicle loadings annually by the way.) Others in the executive suite got treated generously as well.

During what is supposed to be a time of restraint and austerity, BCF decided they need fancy new headquarters. In a no-bid deal, they gave a private developer a loan of $25 million through 2nd mortgage and signed a long term lease. The developer got a sweetheart no-risk deal and could have financed the building with none of their own cash. Who besides Victoria's uber-wealthy Jawl Family got an chance to participate?

While the executive was treating themselves to new digs and big salaries, ship maintenance budgets were being squeezed. On one recent trip, I talked with an elderly man who was hobbling around the car deck, unable to go to the passenger areas because elevators were out of service and he lacked physical ability to climb a lot of stairs. I talked to a ferry staff member who said it was not uncommon because of aging equipment that needed replacement.

Unfortunately, the BCF board of directors is used as a patronage reward system and those people selfishly care too little about the service.